Mortgage companies and banks profited by disproportionately selling high-interest subprime mortgages to Black and Latino communities who had been historically denied equal access to credit. A former Chase vice president described how executives earned higher commissions from subprime loans and targeted less educated and non-English speaking borrowers, who were disproportionately Black and Latino, steering them to subprime loans with higher interest rates and greater risk of foreclosure. Studies found that subprime lenders were most active in communities of color even when they had similar incomes to white communities. Communities of color had historically been denied good loans through practices like redlining and faced continued discriminatory barriers to credit access.

1. !" In 2006,why were Latinos 3.5 times more likely and Blacks 5 times
more likely than Whites in New York to receive sub-prime loans?[1]
A. “They’re irresponsible with their money.”
B. “They always want more than they can afford.”
C. Mortgage companies and Banks profit by selling high-interest
sub-prime mortgages to Black and Latino communities who have
historically been denied equal access to credit. (see back for details)
#$%&'( If you answered A or B, you believed the hype. If you answered C, you poccupied the hype!
POCCUPY People of color confronting
the HYPE miseducation and raising consciousness.
· Former Chase Vice President described “executives earned a commission seven times higher from subprime loans, rather
than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage
experience, or without fluent English — and nudged them toward subprime loans. These less savvy borrowers were
disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose
their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up.”[2]
· A study by N.Y.U.’s Furman Center for Real Estate and Urban Policy found that NY subprime lenders were most active in
communities of color. These lenders had much lower rates in White communities even with similar median incomes.[3]
· Communities of color have historically been denied good loans. The government’s Home Owners Loan Corporation maps
outlined Black urban neighborhoods to show where banks should not lend. After this practice became illegal by the
1968 Fair Housing Act, the discriminatory practice (“redlining”) continued less formally.[4]
[1] Furman Center for Real Estate and Urban Policy (2009).
“The High Cost of Segregation: Exploring the relationship between racial segregation and Subprime Lending.”
[2] Kristof, Nicholas (November 30, 2011). “A Banker Speaks, With Regret.” The New York Times.
Available at: http://www.nytimes.com/2011/12/01/opinion/kristof-a-banker-speaks-with-regret.html?_r=4
[3] Furman Center for Real Estate and Urban Policy (2009).
“The High Cost of Segregation: Exploring the relationship between racial segregation and Subprime Lending.”
[4] Hunt, Bradford. “Redlining.” The Encyclopedia of Chicago.
Available at: http://encyclopedia.chicagohistory.org/pages/1050.html